Net interest margin securities have become a standard structure, occasionally used in various asset classes such as mortgages or (infrequently) autos.

The principal involves securitizing the residual cash flows of a trust, which imputes principal and interest portions to the cash flow, but does not explicitly distinguish between those two elements. It is critical that investors understand where they rank in the pecking order, as they will be last in line to receive any payments from the "waterfall" after the other senior and subordinated classes.

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